Open for Business: 8 Things in the First 180 Days
Today marks the six month anniversary of Red Bit Blue Bit. That’s right, I’ve been in business for about 180 days. I wrote my thoughts on the first 30 days; now it is time for a follow up. Without further ado, here are my thoughts on business:
I’m glad to be open for business
A few weeks ago I was feeling frustrated with the sheer volume of stuff I needed to get done. More importantly, I was getting overwhelmed with the sense that nothing was getting done due to life. The Wife, wise in business, pointed out that most businesses die within the first year. She noted that being too busy was a great problem to have. That changed my perspective quite a bit. I thank God for the success I’ve had so far and I’m glad to have more than enough.
It’s scary not knowing anything
One feeling I had during recent months is that I don’t know anything. What made it worse was the fear that everyone would figure that out. I asked dumb technology questions that in the past I might have known and that led to quite a bit of anxiety. The realization that came after meditating about that was this: I just know different things. When I worked as software developer as an employee, my focus was on the technology. The past year-and-a-half saw a fundamental shift in what I was reading and learning – marketing, business planning and entrepreneurship. These topics were a necessity for starting a business, but made the transition back into contract programming more difficult. I had to play catch up to get comfortable with technical details again.
Do things only when necessary
A key to building a successful startup by yourself is understanding what is important and what is not. All of the things I really want to do have taken a back seat to ensuring the profitability of the company. My first business cards were made in Word without a fancy logo or font and I’m still using those cards. The Red Bit Blue Bit website is still a placeholder contact form because I haven’t needed anything more quite yet. I did design a quick logo recently, but it wasn’t until I needed it for an ad I was placing in a small directory. Gary K. Evans writes in Going It Alone about purchasing a fax machine the day a client needed to fax a contract to him but no sooner. “That machine lasted seven years, but it had to pay its own way first.”
Networking starts early
One concern I expressed in my 30-day post was in networking. The fear I had was getting out there and talking to people I didn’t know. I had that all wrong. Networking is about talking to the people I already know. Through connections and relationships I maintained, I have had work fall in my lap. Other work has come about because of outstanding customer service I provided. All of this has been surprisingly easy because none of it has been handing out a pile of business cards in exchange for the business cards of a pile of strangers. I have particularly found LinkedIn to be invaluable. It has provided passive communication with those I know in the industry. I see when they have changed jobs and that provides an opportunity to send out an email congratulating them on their career move. Communication is what networking is all about, so writing that email keeps us connected.
Be on top of invoices
My current contract stipulated my first payment within 15 days, and each following payment within 30 days of invoice. When 20 days came and went, I phoned my client’s accounts payable department. I dreaded having to make a collections call. It turned out to be nothing more than miscommunication between their contract people and AP. No one had bothered to let the good folks in AP know a special arrangement had been made. The check arrived three days later.
The transition to a new accounting system by the same client has not gone so well. Invoice payments have been late, so my further contracts will stipulate a service fee for late payment. I am hounding their accounts receivable department. Getting paid fast is a topic near and dear to many business owners’ hearts.
One quick note on electronic invoicing: There are many great tools out there for invoicing including QuickBooks, Microsoft Office Accounting (free Express edition!), and Blinksale to name a few. The one I chose was FreshBooks. Both Blinksale and Freshbooks were appealing but Freshbooks won out after a read a usability review of their site. The site is friendly and helpful. While its not built into a full accounting package, the ability to email invoices has been great. Electronic invoices cut out a week of delay in payment. I couldn’t be happier.
Accounting – ye thorn in my side.
Big Joe, my roommate from college, would probably shake his head in disgust. After all, he watched me struggle in accounting class and shook his head in disgust then. For some reason, I just don’t get accounting. But since I haven’t had more than 30 transactions in a month I can’t justify paying someone to do the books. Currently, I keep a cash flow statement spreadsheet I found in a Cash Flow post by Ryan Carson on 37Signals. I also keep good tabs on the checking and savings accounts at Chase. Its enough to get me by until my accountant runs screaming from the room after doing the taxes. Using a cash in / cash out accounting philosophy has worked well for me on the business side.
Hourly is bliss
With a flexible client, working hourly is a wonderful thing. During one 88-hour pay period before Christmas, I worked 40 extra hours to meet the project deadlines. That income will paid off during the holiday season when vacations shrunk my billable hours. I didn’t mind putting in the extra time to get the job done either. Some managers might say they don’t pay overtime because they don’t want their employees to be “taken advantage of”, but the truth is this: People will work overtime when needed but not for zero personal benefit. When an employer pockets the extra cash there is no motivation to miss out on family, friends and hobbies.
Freedom, sweet freedom.
As a slight paranoid, I was always worried when I needed to leave a few minutes early, schedule personal appointments or needed a quick powernap to recharge. Now I am free from that fear and it shows in my desire to get the job done through sheer focus. If my billable hours are short for the week, its no big thing. Coming and going on my own schedule is also a requirement to avoid being reclassified as a permanent employee of a company.
Conclusion
Overall, business has been going great. I think I’ll sign up for at least another six months. Wearing many different hats (sales, marketing, accounting (yuk), and development) has been exciting. I do enjoy the variety involved in running my own business.
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